financial accounting
The International Financial Reporting Standards
The International Financial Reporting standards (FASB) are a set of standards used to establish a uniform global accounting standards. FASB also assumes the role of working hand and hand with the International Accounting Standards Board (IASB) to converge International Financial Reporting Standards and generally Accepted Accounting Principles in the United States. Essentially the FASB is working to make the two sets of accounting standards increasingly similar in order for the standards to transfer across the world according to the Center for Audit Quality. The standards are then broken down into different Statement of Financial Accounting Standards (SFAS).
Statements of Financial Accounting Standards (SFAS) or considered formal documents issued that detail accounting standards and guidance on selected accounting policies set out by FASB. These Statements of financial accounting standard are issued, with expectations that all reporting companies listed on American stock exchanges will adhere to them. The standards are created to ensure a higher level of corporate transparency. New SFAS releases can have a huge affect on the bottom line of a business. An example of this can be seen when look at FAS123 which can increase a company’s expenses by billions of dollars dramatically according to Investopedia. However the particular standard that I will be focusing on and analyzing is SFAS 151.
According to the Financial Accounting Standard Boards’ (FASB) Website the SFAS 151 standard was implanted as a result of a broader effort by the FASB to improve the comparability of cross-border financial reporting. Through working with the IASB mentioned previously they identified opportunities to improve financial reporting by elimination certain narrow difference between the existing accounting standards. The accounting for inventory cost, In particular, abnormal amounts of idle facility that the FASB decided to address by issuing this particular statement. The statement itself single handedly eliminates chapter 4 as it is worded in Read the rest of this entry »
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